The Speaker
Friday, 24 May 2024 – 23:33

Italy’s public deficit breaching the legal ceiling in 2020

Although Italian provisional budget has been thought with an estimated GDP (gross domestic product) growth of 1,5% for 2019, European Commission evaluated it at 1,2% for next year, and at only 1,3 for 2020. This would increase the public debt and deficit: the European Commission rejected the provisional budget and claim for another one by the 13th of November.
The Stability and Growth Pact (SGP), agreement among the 28 Member states of the European Union, asks governments to have public deficits under 3% of the GDP. If Italy keeps its economic policy, its public deficit would breach the ceiling, with 3,1% according to the Commission.
Regarding Italy’s public debt, it would stay the second highest in Europe, up to 131% of GDP after Greece’s.
Italian minister of finance Giovanni Tria said the country would reduce its deficit in 2020. Without a change in the financial program, the Commission considers it will not be the case. Italy’s government, comprised of a populist coalition with ‘Lega Nord’ (regionalist party from right-wing, Eurosceptic and anti-immigration) and ‘Movimiento 5 Stelle’ (anti-system, Eurosceptic, environmentalist) undertakes stimulus social measures such as universal income or decrease in retirement age. A change in the country’s budget should compromise the government’s plan.
France, Spain, Portugal or Belgium neither do they check Commission’s requirements. But the Commission feels these states are making every effort possible in their budget policy, contrary to Italy. Giovanni Tria accuses the Brussels’ Commission of “technical failure”.

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